It is well known that the performance of simple models of economic growth improves substantially through the introduction of subsistence consumption. How to compute subsistence needs, however, is a difficult and controversially discussed issue. Here, I reconsider the linear (Ak) growth model...

Four stylised facts of economic growth in DCs are set up initially. Despite its obvious simplicity the linear growth model with subsistence consumption is able to reproduce two of them: a rise in the saving rate along with per capita income as well as divergence. The rate of convergence shows...